I am currently building a repeater logic for a radio project and I have the need to decode CTCSS as an access method.

I've searched quite a lot and found no one doing it with the Arduino, only PIC and I don't know if that's an accurate reading or not. There is still hardware decoders out there but they are old and costs a lot, all the new radios today have all the options in one big IC.

My first thought was to use the pulseIn() function and measure the input line via a low pass filter and a schmitt trigger but have not yet tested this theory. Do you think it's possible? Can the readings be accurate enough to not open on a nearby CTCSS frequency?

Quite possible, there is 48 notes recognition, which is pretty close:http://coolarduino.wordpress.com/2011/09/03/arduino-musical-note-recognition-pushing-the-limits/Better instead of UNO use Mega, more memory 'd not hurt. As messages "overlapped" with regular audio traffic (wiki says), good quality LPF necessary, sharp 3-5 -th order, not ready to say if arduino could manage it or hardware / co-processor has to be